Carriers' Interest In Gdynia Continues

There has been a positive start to 2013 for Poland's second-largest port, Gdynia, with the facility welcoming a new box service. The continued interest in the port from container lines shows no sign of abating, with carriers keen to gain exposure to Poland's growth outlook, leading BMI to forecast another year of double-digit container throughput growth for this year.

Short Term: New Service Highlights Continued Interest In Gdynia

Hapag-Lloyd has launched a new feeder service, the Poland Express Service (PEX), linking the port of Gdynia to Hamburg and Bremerhaven. The new service marks a positive start to the year for the port's container throughput. We predict the slowdown in box throughput growth at the port to continue in 2013, but it will remain in the double digits, with an 18% increase projected, which would take container levels at the port to a predicted 873,620 twenty-feet equivalent units (TEUs).

The 18% increase would mark a slowing in throughput compared to the 20% year-on-year (y-o-y) increase at the port which we estimated for 2012 with 739,729 TEUs handled. The port of Gdynia has yet to release figures for 2012, but one of the container terminals at the facility (there are two), the Baltic Container Terminal (BCT), which is operated by International Container Terminal Services (ICTSI) has released 2012 data for its operations. In 2012 BCT handled 408,722 TEUs, a y-o-y increase in throughput of 13%.

This increase was achieved despite disruptions to the terminal''s operations. At the end of May 2012 a ferry, the Stena Spirit, collided with quay crane number five at the BCT. The crane collapsed, three engineers were injured, and an adjacent crane was damaged, as were parts of the quayside and empty containers that had been stacked there.

Despite the damage, ICTSI reported that interruptions to the terminal operations were kept to a minimum and a replacement crane, which was intended for ICTSI's Tartous operations in Syria, was shipped to Gdynia at the end of June. The incident, in our view, highlights the benefit of having a global terminal operator operating at a port. ICTSI was able to quickly replace the damaged crane with one from another of their other operations, thereby preventing too much disruption, which would have affected the facility's box throughput.

Tonnage throughput at the port in 2013 is forecast to strengthen, with a y-o-y increase of 6.77% predicted up from an estimated 6.3% increase in 2012, with the port forecast to recover to its pre-downturn throughput levels in 2013. It will have taken six years, but in 2013 BMI predicts the port of Gdynia to handle 18mn tonnes, a level last achieved in 2007.

Medium Term: Expansion Offering Upside

BMI forecasts the slowing in container throughput growth to continue over the medium term, but highlight that expansion plans at the port of Gdynia offer upside risk.

Upside Risk
LHC: Port of Gdynia Throughput, Tonnes '000 and y-o-y % Change. RHC: Port of Gdynia Container Throughput, TEU and y-o-y % Change

ICTSI announced in May 2012 that it had reached a credit facility agreement for US$46.5mn with Poland's Bank Pekao in order for the operator to modernise BCT.

Investment will be made in new equipment, such as new quay cranes, rubber tired gantries and rail-mounted gantries as well as yard area improvements and IT systems. The upgrade project is due to be completed by the end of 2015 and is set to boost ICTSI's BCT's capacity by 60% from 750,000 TEUs to 1.2mn TEUs.

Neighbouring terminal operator Hong Kong's Hutchison Port Holdings (HPH), which operates the Gdynia Container Terminal (GCT) at the port, is also investing in its facility. Plans are underway to follow in the footsteps of Gdansk and go deeper.

The project will see the facility's Bulgarskie Wharf extended, with a quay length of 357 metres (m) and a draft of 15m, allowing the GCT to cater for vessels with a capacity of over 8,000 TEUs. Despite this expansion, the port will not be as deep as Gdansk's Deepwater Container Terminal (DCT), which has a draft of 17m.

These projects therefore offer upside risk to our medium-term container throughput forecasts for the port of Gdynia, with BMI currently forecasting box volumes to increase by 65.3% over the 2013-2017 period, an annual average increase of 10.6% to reach a projected 1.2mn TEUs in 2017.

In total tonnage terms BMI forecasts volumes to grow by 41.5% over this period to reach a projected 23.9mn tonnes in 2017, a y-o-y average increase of 7.2%.

Long Term: Competition To Continue, But Feedering Role Likely To Remain

While BMI expects the port of Gdynia to remain in second place behind the port of Gdansk, the facility will continue to try and compete and over the long term will be seeking to reclaim its top place in Poland's container shipping supply chain.

Competition To Continue, But Gdansk Pulling Ahead
Port of Gdansk Container Throughput, TEU and Port of Gdynia Container Throughput, TEU*

The port of Gdansk overtook Gdynia in terms of higher container throughput in 2010 and has powered ahead both in terms of volumes, but also in its ability to handle larger ships. This ability lead to Maersk Line switching its operations from Gdansk to Gdynia and has seen Gdansk welcome the one of the largest container ships afloat. This has highlighted why ports must keep up with size trends if they wish to retain their position.

Gdynia is trying to remedy this; as mentioned the facility's Bulgarskie Wharf is being extended to include a draught of 15m, this is still considerably shallower than the 17m on offers at Gdansk's DCT and would not be enough to enable the port to handle the new class of container mega vessel. BMI believes that while Gdansk is likely to be added as a call on direct trade routes, Gdynia will continue to play a feeder role. However, this role is continuing to expand, as Hapag-Lloyd's new service illustrates, and so box throughput growth will continue to increase into the longer term.

This article is tagged to:
Sector: Freight Transport, Shipping
Geography: Poland, Poland, Poland, Poland

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